Housing construction Berlin 2015: IVD welcomes Geisel's subsidy plans

The German Real Estate Association (IVD) Berlin-Brandenburg has welcomed housing senator Andreas Geisel's (SPD) announcement to promote residential construction in Berlin through new instruments. At the same time, rents for low-income households are to remain affordable.

"That Berlin urgently needs new housing construction to meet demand is no longer news. So it is good that the senator is dealing with this topic thoroughly," said Dirk Wohltorf, chairman of IVD Berlin-Brandenburg.

Geisel's plan: income-based construction subsidies

At the core of the proposals was a subsidy system tied to tenant incomes and designed to be adjustable over time. The aim was to ensure that people on lower incomes can still find apartments in Berlin. The IVD viewed it favourably that the allocation of social housing would avoid past mistakes that had led to social hotspots.

IVD: "The problems are homemade"

At the same time, the association criticised years of policy failure. "The problems we are seeing now are homemade. What we are witnessing is not forward-looking policy but the correction of political failures of recent years," said Wohltorf. Too few building permits, insufficient designated building land and rhetoric hostile to investors had caused the current housing shortage. The market trend in recent years showed a continuous rise in rents and purchase prices, amplified by inadequate supply.

What it meant for investors

A reliable construction subsidy scheme could improve the viability of building projects in the affordable housing segment. For owners of existing properties, expanding supply would have meant a more stable market in the long run, even though demand pressure would stay high in the short term.

The need for new apartments was particularly acute in fast-growing boroughs like Pankow and Lichtenberg. "Let us hope that these correct approaches are now followed through consistently," Wohltorf said.